Mogan v. Sacks, Ricketts & Case LLP

Background

Michael Mogan filed an application asking the court to stay, or pause, the judgment while he pursued an appeal. The opinion states that the court had awarded Airbnb Defendants $162,160.20 in fees and $573.90 in costs, and had awarded SRC Defendants $16,399.00 in attorneys’ fees. Mogan also sought a waiver of the bond ordinarily required to obtain a stay of a monetary judgment.

Rule 62(c)

Mogan argued that a stay was appropriate under Federal Rule of Civil Procedure 62(c) because he was likely to succeed on appeal. The court explained that a party seeking a stay must show either a strong likelihood of success and possible irreparable harm, or serious questions on the merits combined with hardships sharply favoring a stay.

The court declined to issue a stay under Rule 62(c). Mogan relied on arguments concerning fee mitigation, consent to magistrate-judge jurisdiction over the sanctions motion, notice of that motion, and evidence supporting the fees. The court stated that it had already rejected those arguments in an earlier order and that Mogan had not provided supporting case law showing a strong likelihood of success or serious questions on appeal. The court therefore denied Mogan’s request for a stay under Rule 62(c).

Rule 62(d) and the bond requirement

Mogan separately requested a stay under Federal Rule of Civil Procedure 62(d) and asked the court to waive the requirement of a supersedeas bond. A supersedeas bond generally protects the prevailing party against the risk that a judgment will later be uncollectible while an appeal is pending.

The court applied factors used to decide whether to waive the bond requirement. It found that Mogan’s pending bankruptcy proceedings and continued effort to reorganize weighed against waiver. The court also found that Mogan’s assertion that he could not pay the judgment undermined confidence in his ability to pay and showed why a bond was needed to protect defendants’ interests. The court denied Mogan’s request to stay the judgment and waive the bond requirement under Rule 62(d).

Bankruptcy automatic stay

Mogan argued that the bankruptcy law’s automatic stay, 11 U.S.C. § 362(a)(1), prohibited continuing the judicial proceedings while his bankruptcy case remained pending. The court disagreed and relied on its earlier order addressing the same argument.

The court explained that exceptions to the automatic stay apply to sanctions for misconduct under Rule 11 and to the fee award involving the SRC Defendants. It concluded that the bankruptcy filing did not prevent the court from awarding attorneys’ fees under Rule 11 or California’s anti-SLAPP statute. The court therefore denied Mogan’s request for a stay under 11 U.S.C. § 362(a).

Disposition

The court denied Mogan’s application for a stay of judgment. Judge Thomas S. Hixson signed the order on July 25, 2022.